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Managing China's management of us

Kevin Rudd speaks mandarin. But while he was (briefly) Prime Minister he could not secure a free trade agreement with China. New Zealand is still not just the first but the only “advanced” economy in free trade with the celestial empire.

There was much talk of New Zealand’s numerous “firsts” with China at Otago University’s annual foreign policy “school” at the weekend as explaining much of our “special relationship”.

Actually, said Defence Secretary John McKinnon, former ambassador in Beijing, China has many “special relationships”, each with distinct characteristics (New Zealand’s, however, having some salience). It is how those interests fit into China’s interests that counts.

Chinese self-interest, several speakers said, is its driving foreign policy principle. So it has dealt with some of the world’s worst regimes to secure resources or other advantages. Professor Shen Dingli of Fudan University defended China’s support of Myanmar and North Korea and asked for “respect”.

So what? Hasn’t pursuit of sovereign self-interest been the foundation principle of the nation-state for 500 years, even, now, at the United Nations?

Yes, except that some nation-states see self-interest, at least on some matters, as served by collaborating with some, many or all other nation-states. New Zealand does.

In fact, China is drawing back from some of its nastier friends because (Professor Zhao Suisheng of Denver University said) they are unstable and China may not get what it wants. As China acquires more economic weight and, with that, more soft power — as it transits from rising power to global power — pressure is growing for it to pull some collaborative weight and stop affecting an inappropriate low profile.

In the 1950s and 1960s, China did take strong positions and confront others. It took on the United States in Korea and forced a stalemate which endures. It shelled offshore islands belonging to Taiwan, which the United States backed.

But in recent decades China has focused not on exporting revolution but on making its people prosperous by exporting goods to rich democracies. A non-threatening foreign policy assisted that. China sought and got World Trade Organisation membership to reduce barriers to exports. From the United States’ perspective, China’s joining such organisations locked it into the world order as defined by the democracies.

But who will do the defining in future? Since the financial crisis China has become more assertive. It promoted its heavily state-influenced economy against the Anglo-Saxon model (which it sees as discredited). It threatened sanctions against United States firms if United States continued selling arms to Taiwan. (The United States has continued.)

But this is still far from global leadership. China shrinks from being a “G2” lead manager with the United States (and thereby made a muddle at Copenhagen) and, Professor Canrong Jin of Renmin University in Beijing said, would not make the Soviet Union’s self-destructive mistake of challenging the United States. Professor Zhao said: “China still hasn’t found its rightful place in the world. China is still asking what the world can do for China. It is still not asking what China can do for the world.”

Vice-President Xi Jinping of this rising but uncertain China visited two weeks back. After Russel Norman’s altercation with Xi’s security men on Parliament’s forecourt, his officials demanded and our government and Victoria University agreed to shift the signing up of a new Confucius Institute from the university to Xi’s hotel. Chinese journalists were there. So were many local dignitaries, as originally invited. New Zealand journalists were barred (including me, though invited through my association with the university).

On the surface that looks like grovel, harbinger of a future as a modern sort of vassal state.

But here is another explanation suggested to me: that Xi is reputed to be a reformer and so needed to protect his back with a firm response to Norman’s challenge.

If so, Xi’s successor 10 or 20 years hence might ignore a petty protest. Xi’s over-reaction reflects a lack of the confidence which would come from a “rightful place in the world”.

There will be plenty for China to be unconfident about: water shortages, access to resources, social and income inequalities and tensions as it works out how citizens can have more civil and political voice. The economic growth rate will slow.

This does not mean we are nearing a “post-China world” as a silly Newsweek headline put it last week. But it does mean China may take a while to assume joint leadership of a new global system with the United States and Europe and India.

And on the way there could be bumpy experiences for small countries dependent on China’s huge consumer market and bound to accept growing Chinese ownership of their economies.

That is why our biggest foreign policy issue is managing China’s management of us. Which will need a grovel-obviating strategy.